Project Summary: Cell memory plays a key role during differentiation and disease. It relies on epigenetic inheritance that is essential to propagate gene expression program through cell generation, in large part through maintaining the structure of chromatin in daughter cell. DNA replication is the major obstacle in conservation of chromatin structure. During replication, most proteins are thought to dissociate from DNA. A few molecules may remain associated with DNA, thus marking DNA regulatory elements for future maturation of chromatin into an open or compact conformation. The identity of these epigenetic marks is unknown. The best candidates are thought to be modified histones because they are assumed to transfer from the parental to daughter nucleosomes on nascent DNA. However, until recently, there were no experimental approaches to directly examine neither the nature of epigenetic marks, nor the order and timing of recruitment of chromosomal proteins to DNA following replication. Similarly, we know very little about how and when transcription resumes after DNA replication. We developed several new experimental approaches that allow addressing these key epigenetic issues, and found that the structure of chromatin is not as severely disrupted as is currently suggested. RNA Polymerase II and related general transcription and elongation factors are found on nascent DNA just after replication. Moreover, even immature RNAs are found in the proximity to nascent DNA suggesting that the RNA Pol II ? RNA complex is able to survive DNA replication. We also found that transcription resumes relatively quickly after DNA replication. Based on our published and preliminary results, we propose to test a new epigenetic concept suggesting that once transcription is established, most of the transcriptional apparatus may be associated with DNA through replication, thus serving as an epigenetic mark for active genes. This possibility, however, conflicts with the conventional model suggesting that transcription and replication complexes travel along DNA, since this will lead to collisions of these protein complexes. To resolve this contradiction, we will test the hypothesis that the stability of the transcriptional machinery through replication can be resolved if transcription and replication occur in the stationary nuclear sub-domains, transcription and replication factories, and that DNA is reeled through these protein factories. The results of these experiments will greatly contribute to our understanding of the epigenetic processes, and may have a major impact on developing new approaches in many biological and drug discovery fields.